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Directed Altruism and Enforced Reciprocity in Social Networks

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  • Mobius, Markus
  • Do, Quoc-Anh
  • Leider, Stephen
  • Rosenblat, Tanya

Abstract

We conduct online field experiments in large real-world social networks in order to decompose prosocial giving into three components: (1) baseline altruism toward randomly selected strangers, (2) directed altruism that favors friends over random strangers, and (3) giving motivated by the prospect of future interaction. Directed altruism increases giving to friends by 52 percent relative to random strangers, while future interaction effects increase giving by an additional 24 percent when giving is socially efficient. This finding suggests that future interaction affects giving through a repeated game mechanism where agents can be rewarded for granting efficiency enhancing favors. We also find that subjects with higher baseline altruism have friends with higher baseline altruism.

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Bibliographic Info

Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3054685.

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Date of creation: 2009
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Publication status: Published in Quarterly Journal of Economics
Handle: RePEc:hrv:faseco:3054685

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  1. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
  2. David Marmaros & Bruce Sacerdote, 2006. "How Do Friendships Form?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 121(1), pages 79-119, 02.
  3. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, Econometric Society, vol. 62(3), pages 539-91, May.
  4. Leider, Stephen & Mobius, Markus & Rosenblat, Tanya & Do, Quoc-Ahn, 2010. "What Do We Expect from Our Friends?," Staff General Research Papers 32103, Iowa State University, Department of Economics.
  5. Quoc-Anh Do & Stephen Leider & Markus M. Mobius & Tanya Rosenblat, 2008. "Directed Altruism and Enforced Reciprocity in Social Networks," Working Papers, Singapore Management University, School of Economics 17-2008, Singapore Management University, School of Economics.
  6. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, Econometric Society, vol. 70(2), pages 737-753, March.
  7. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers, University of California at Berkeley 92-199, University of California at Berkeley.
  8. Szeidl, Adam & Rosenblat, Tanya & Mobius, Markus & Karlan, Dean, 2009. "Trust and Social Collateral," Scholarly Articles 3051620, Harvard University Department of Economics.
  9. Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
  10. Margin Dufwenberg & Georg Kirchsteiger, 2001. "A Theory of Sequential Reciprocity," Levine's Working Paper Archive 563824000000000090, David K. Levine.
  11. Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 61(3), pages 495-526, July.
  12. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching, EconWPA 0303002, EconWPA.
  13. Brañas-Garza, Pablo & Cobo-Reyes, Ramón & Espinosa, María Paz & Jiménez, Natalia & Kovárík, Jaromír & Ponti, Giovanni, 2010. "Altruism and social integration," Games and Economic Behavior, Elsevier, Elsevier, vol. 69(2), pages 249-257, July.
  14. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination In A Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(1), pages 351-377, February.
  15. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, American Economic Association, vol. 86(3), pages 653-60, June.
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